The law today
On July 19, 2021, the Financial Market Commission (hereinafter, the “CMF”) published General Rule No. 457 (hereinafter, the “NCG”), which simplifies the issuance of publicly offered securities. The NCG amends General Rule No. 30 (hereinafter “NCG 30”) in order to facilitate the registration of issuers and public offering securities in the Securities Registry of the CMF; and General Rule No. 303 (hereinafter “NCG 303”) of the CMF, simplifying the content of applications for registration of securitization debt securities and their registration in the Securities Registry of the CMF.
1. Main amendments to NCG 30.
i. Regarding the information required from entities registered in the Securities Registry:
(a) The date of publication and disclosure of financial statements by issuers of securities must be disclosed at least 30 days in advance, through their website and through the CMF’s System for Sending Information Online (SEIL).
(b) Open stock corporations must publish the notice of shareholders’ meetings no less than 10 days in advance.
ii. The issuance of publicly offered securities is simplified:
(a) The requirement to send prospectuses prior to their disclosure is eliminated, notwithstanding that their format and content must conform to the minimums established by the CMF.
(b) The requirement to submit to the CMF the facsimiles of the materialized securities and the security certificate of the printing company, the contracts with the securities depository company in case of dematerialized securities, the background information evidencing the quality of the qualified experts and the mnemonic code of the security is eliminated.
(c) The obligation to submit the information required for the registration of public offering securities in duplicate is eliminated.
2. Main amendments to NCG 303.
Several modifications are introduced to the procedures to be followed by securitization companies for the issuance of securitized debt securities and their registration in the Securities Registry, in order to simplify them and homologate them to the bond registration process contained in NCG 30. To this effect, the content of the applications for registration of securitization debt securities is simplified, eliminating certain requirements and obligations.
3. Amendments to the Updated Compilation of Norms (RAN).
To this effect, it states that in order to register in the Securities Registry an issue of bonds other than subordinated and perpetual bonds, the entity must follow the procedure set forth in Section IV of NCG 30.
The provisions contained in the NCG became effective on July 19, 2021.
General Rule No. 452: exempts from the obligation to register certain public offerings of securities and amends General Rule No. 336 of 2012.
On February 22, 2021, the Financial Market Commission (hereinafter, the “CMF”) published General Rule No. 452 (hereinafter, the “NCG 452”), which exempts certain public offerings of securities from the obligation to register the issuer or security and amends General Rule No. 336 of 2012 (hereinafter, the “NCG 336”). It also repeals General Rule No. 345 and paragraphs 1 and 2 of Circular No. 125.
The instructions established by virtue of NCG 452 will become effective as of the same date of the issuance of the rule.
1. Excepted public offerings
i. Those whose securities may only be acquired by qualified investors.
ii. Those made in national stock exchanges, provided that the total accumulated amount to be raised by the issuer or offeror in the 12 months following the first offer made in the stock exchange does not exceed the equivalent of 100,000 Unidades de Fomento, and that the offeror or the issuer complies with the information requirements that the respective stock exchange has established for the protection of investors in order to make the corresponding offer.
iii. Those that establish as a requirement to improve each operation, that the investor acquires at least 2% of the capital stock of the issuer of the securities.
iv. Those whose purpose is to compensate the employees of the issuer of the securities, or of its parent company, subsidiaries or affiliates, regardless of whether the offer relates to the shares of a collective investment vehicle whose main investment are instruments representing the capital of the former.
1. Those that deal with securities that confer to their purchasers the right to membership, use or enjoyment of the facilities or infrastructure of educational, sports or recreational establishments.
2. Amendments to NCG 336
The following amendments were made to NCG 336:
i. A new paragraph c) is added to number iii) of section I, indicating that public offerings of securities shall not constitute public offerings of securities that are directed to a maximum of 50 investors that do not have the status of Qualified Investor, as long as the copulative requirements of section I indicated in numbers i) and ii) are also met.
ii. The final paragraph of section I is modified in relation to the fact that securities offerings that deal with instruments whose unit value amounts to at least 3,000 Unidades de Fomento shall not be required to comply with the alternative requirements indicated in number iii) of section I of NCG 336.
iii. If the communication or material that is delivered to potential investors is in a language other than Spanish or English, the information must also be included in one of these two languages.
iv. Section IV, paragraph (a) is replaced, indicating that in order to verify the identity and quality of Qualified Investor of the persons indicated in letters (a) and (b) of paragraph (iii) of Section I of NCG 336, a declaration may be obtained from the person acquiring the securities offered, indicating what type of investor he/she is, that is, qualified from 1) to 6) of section II of General Standard No. 216 of 2008, 7) or 8) of the same standard, or that he/she is not a Qualified Investor, and the fact that he/she is aware that the securities to be acquired are not registered in the registers kept by the CMF.
3. Obligations to inform the public
– Those who make the offers indicated in number 1. above, must indicate, in the verbal, physical or electronic communication used to offer the securities, that the offer deals with securities not registered in the registers kept by the CMF and that, therefore, the offer may not be made to the public in Chile:
– No public offering can be made in Chile of such securities; and.
In the event that the issuer of the securities is not registered, such issuer will not be subject to the supervision of the CMF, nor will it be obliged to comply with the continuous information obligations required of registered issuers.
4. Information obligations to the CMF
The offerors of the respective securities must send to the CMF, 5 business days prior to the day on which the offer is intended to be made, the following information:
i. Identification of the Offeror.
ii. Identification of the Issuer of the Security.
iii. Identification of the entity for which the workers perform functions (if applicable).
iv. Type of offer to be made.
v. Total amount intended to be placed with the recipients of the offer, expressed in Chilean pesos as of the day prior to the day the information is sent.
vi. Percentage of the issuer’s capital (if applicable).
Additionally, the offeror must attach to this information a declaration of truthfulness of the same and of the fact that he/she will comply with the instructions given in these regulations.
General Rule No. 451: establishes characteristics or conditions to be complied with in order to register debt securities under the automatic registration modality.
On January 25, 2020, the Financial Market Commission (hereinafter, the “CMF”) published General Rule No. 451 (hereinafter, “NCG 451”), which establishes the conditions and procedure to be complied with to register debt securities (bonds, securitized bonds, convertible bonds, bills of exchange, and in general short or long term debt securities) under the automatic registration mode.
1. Conditions to register debt securities under the Automatic Registration modality.
Debt securities may be registered in the Securities Registry by means of the aforementioned modality, complying with the following conditions:
i. That the registration of the issuer in the Registry is in force on the day of the deposit of the issue whose registration is requested; and
ii. The registration of the issuer has been in force uninterruptedly during the 12 months prior to that date.
In the case of mutual funds and investment funds supervised by the CMF, it will be sufficient that at the time the application is made, it has the minimum net worth and number of participants required by Article 5 of Law 20,712.
Likewise, NCG 451 establishes that the automatic registration modality may not be used by issuers or administrators that, at the date of the application:
i. Have been charged with a possible violation of Article 65 of the Securities Market Law (hereinafter, the “LMV”), while the sanctioning procedure is pending resolution;
ii. That a sanctioning resolution has been issued by the CMF in accordance with the provisions of Article 65 of the LMV, unless three years or more have passed; or
iii. Those who have not yet sent their financial statements (in accordance with applicable regulations).
2. Procedure to be followed to make the registration:
Certain background information must be provided through the SEIL Module – Online Information Sending System – in accordance with the instructions contained in the Technical Sheet provided for such purposes on the CMF’s website.
Once the application for registration has been submitted, and after the applicant has made the corresponding declarations in accordance with the regulations issued by the CMF, the latter will proceed with the registration of the debt securities in the Securities Registry, issuing the corresponding certificate, after payment by the applicant of the registration fees.
The NCG 451 indicates that the instructions of this regulation are effective as of January 25, 2021. However, it adds that for those registration applications pending resolution by the CMF, the issuer must formally request the CMF to cancel them, and after the said request is accepted by means of an official letter from the CMF to that effect, the registration application must be reinstated.
Commission for the financial market gives instructions regarding the technological means authorized for the holding of board meetings.
On November 17, 2020, the Comisión para el Mercado Financiero (“CMF”) published the General Rule N°450 (“NCG 450”), which gives instructions regarding the technological means authorized to hold board meetings and revokes the circular N°1.530 of 2001 of the CMF. In this respect, NCG 450 mainly regulates the following aspects:
1. Authorized technological means: any system of bidirectional transmission and reception of sounds, images or information, which allows the interaction of the directors in real time, simultaneously and permanently.
2. Duties of the board of directors, the general manager and the company:
a) Companies must have at least one system that allows directors to exercise their right to attend board meetings remotely, which must be at no cost to them. For the purposes of the place where the meeting is held, the registered office is understood to be both the legal address of the company and the virtual one, composed of the different systems and means made available by the company.
b) The general manager or the secretary of the board of directors, if the function has been delegated to him, must communicate to each director, with due notice, the form and schedules in which the systems will be available, and must also provide them with the information and documentation that the directors need to deliberate and define the matters to be dealt with at the meeting.
c) It is the responsibility of the president, or whoever acts as president, and the secretary of the board of directors, to record in the minutes the certification of the following:
c.1. That the remote assistance system or systems are enabled, allowing all directors to attend and participate, as well as being connected during the entire session simultaneously and permanently; and
c.2. The identity of those who used such system(s) to participate in the session
d) The deliberations and agreements of each session must be recorded in minutes stored on physical or digital media, which guarantee their fidelity and integrity, and which must be signed (physically or by electronic signature) by all the directors who attended the session, by means of mechanisms that provide certainty regarding the authenticity of the signatures of those directors